Siemens 2010 Annual Report Download - page 181

113 Report on post-balance sheet date events
114 Report on expected developments and associated
material opportunities and risks
128 Information required pursuant to § () and
§ () HGB and explanatory report
133 Information required pursuant to § () and
§ () no.  HGB and explanatory report
135 Compensation and declaration pursuant to §a HGB
135 Additional information for supplemental
financial measures
138 Siemens AG (Discussion on basis of HGB)
147 Consolidated Financial Statements
261 Additional information

Siemens Group
Results of operations
We are basing our outlook for the Siemens Group and its seg-
ments on the above mentioned expectations of the overall
economic situation as well as the specific market conditions
over the next two fiscal years. Our outlook is based on an ex-
change rate of . U.S. dollar per EUR.
With continuing improvement in Siemens’ markets, we expect
organic order intake in fiscal  to show a clear increase
compared to fiscal . Order intake growth is expected to
benefit in particular from growth in our wind and transporta-
tion businesses. Following a decline in fiscal , we expect
organic revenue to show moderate growth in fiscal . The
assumptions underlying this outlook include successful recov-
ery in the global economy as described above, and anticipated
growth in our Environmental Portfolio. In addition, we expect
revenue to benefit from conversion of the strong order backlog
of our three Sectors, which stood at € billion at the end of
fiscal . We expect to convert approximately € billion of
the backlog into revenue in fiscal  and € billion in fiscal
. Within the backlog in fiscal , we expect € billion in
revenue conversion from the € billion backlog of the Energy
Sector, € billion in revenue conversion from the € billion
backlog of Industry, and €. billion in revenue conversion
from the € billion backlog of Healthcare. Based on an ex-
pected positive development in global energy markets and in
our longer-cycle industrial markets, we expect organic revenue
growth to continue in fiscal . Revenue in fiscal  is ex-
pected to benefit from an anticipated book-to-bill ratio above
one in fiscal , as the expected substantial growth in order
intake in our wind and transportation businesses mentioned
above generates revenue growth going forward.
As mentioned earlier, revenue from our Environmental Portfo-
lio is expected to grow from €. billion in fiscal  to more
than € billion in fiscal . The growth rate of our Environ-
mental Portfolio is expected to be higher than for Siemens
overall. In fiscal  revenue from emerging markets contrib-
uted approximately % of total revenue and Siemens intends
to increase this share over time. While we are focusing princi-
pally on organic growth, our strategy also includes options to
strengthen our core businesses via acquisitions and divest-
ments.
We expect that income from continuing operations in fiscal
 will rise by at least % to % compared to reported re-
sults in fiscal . This outlook excludes effects that may arise
from legal and regulatory matters. The assumptions underly-
ing this outlook include anticipated revenue growth as dis-
cussed above, Sector profitability in their respective adjusted
EBITDA margin corridors, and improved results below the Sec-
tors as discussed below. Further assumptions include limited
effects related to currency, only a moderate increase in pricing
pressure, and a positive contribution from supply chain man-
agement. Expenses for R&D are expected to grow in fiscal 
in absolute terms, and also as percentage of revenue. As part
of our growth plans within certain markets and regions, we
also plan to increase our expenses for SG&A in absolute terms
compared to fiscal , in particular marketing & selling ex-
penses with respect to go-to-market activities. We will monitor
the development of actual order growth carefully and reassess
the planning for R&D and SG&A promptly, if our growth mo-
mentum should slow. The income contribution from supply
chain management is expected to be more limited than in fis-
cal , while pricing pressure from customers is expected to
be higher than in the prior year mostly due to rising competi-
tive dynamics in the Energy sector particularly in China. Based
on a positive macroeconomic environment, revenue growth
and success with our go-to-market activities, we expect posi-
tive development in income from continuing operations in
fiscal .
We are exposed to currency translation effects, involving the
U.S. dollar, British pound and currencies of emerging markets
such as China, India and Brazil. We also expect volatility in
global currency markets to continue in fiscal . Given that
Siemens is a net exporter from the Europe zone to the rest of
world, a weak Euro is principally favorable for our business.
Through optimization of our production facilities during the
recent past, we have improved our natural hedge on a global
basis. In addition, we have already systematically addressed
the remaining currency risk in our export business activities
for fiscal , see “Notes to Consolidated Financial State-
ments.” We expect these steps to help reduce effects on in-
come related to currency in fiscal .